At the start of each week I like to look at ASIC's short position report to find out which shares are being targeted by short sellers.
This is because I believe it is well worth keeping a close eye on short interest levels as high levels can sometimes be a sign that something isn't quite right with a company.
With that in mind, here are the 10 most shorted shares on the ASX this week according to ASIC:
- Flight Centre Travel Group Ltd (ASX: FLT) is now the most shorted ASX share after its short interest rose to 10.4%. Short sellers have been increasing their positions since the release of a trading update out of the travel agent. That update revealed that its second half loss is expected to be as large as the one recorded in the first half. This was materially more than the market anticipated.
- Kogan.com Ltd (ASX: KGN) isn't far behind after its short interest jumped to 10%. Once again, a recent trading update has caught the eye of short sellers. That update revealed that the ecommerce company's growth has slowed, margins have contracted, and that it is having issues with inventory.
- Resolute Mining Limited (ASX: RSG) has seen its short interest rise week on week to 9.8%. This gold miner's shares have come under pressure due to regulatory issues at its Bibiani operation in Ghana and its disappointing production and guidance.
- Tassal Group Limited (ASX: TGR) has short interest of 9.6%, which is flat week on week. This high level of short interest appears to have been driven by weakness in salmon prices.
- Temple & Webster Group Ltd (ASX: TPW) has seen its short interest remain firm at 9.4%. This online furniture and homewares retailer appears to have been targeted by short sellers due to plans to invest materially in its growth at the expense of margins.
- Webjet Limited (ASX: WEB) has seen its short interest rise week on week to 8.9%. Concerns over the stuttering travel market recovery and its valuation appear to be weighing on investor sentiment.
- Megaport Ltd (ASX: MP1) has short interest of 8.1%, which is up again week on week. Short sellers may be going after the Network as a Service provider due to concerns over rising bond yields and its premium valuation.
- Inghams Group Ltd (ASX: ING) has 7.9% of its shares held short, which is down slightly week on week. Investors may be nervous about its major contract renewal negotiation with Woolworths Group Ltd (ASX: WOW) and the sudden exit of its CEO.
- Zip Co Ltd (ASX: Z1P) has short interest of 7.2%, which is up week on week. This high level of short interest is likely to be due to valuation concerns. Zip and fellow BNPL providers trade on very high multiples.
- Metcash Limited (ASX: MTS) has seen its short interest edge lower again to 7.1%. Reports that trading conditions are reverting back to normal again in the supermarket industry could be weighing on sentiment. These trends appear to be favouring the big two supermarket chains ahead of independents.
